U.S. Legislators Mount Pressure on CFTC to Impose a Ban on Election Betting
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On August 5, a group of U.S. legislators urged the Commodities Futures Trading Commission (CFTC) to end betting on the 2024 presidential election to protect the integrity of the electoral process and restore public trust.
Senators Issue Letter to CFTC Chairman to Push for Election Integrity
A coalition of eight lawmakers, including Senators Jeff Merkley, Richard Blumenthal, Chris Van Hollen, Elizabeth Warren, and Sheldon Whitehouse, as well as Representatives Jamie Raskin, John Sarbanes, and Eleanor Holmes Norton, submitted a joint letter to CFTC Chairman Rostin Benham.
In their letter, they expressed concerns about the increasing sway of Wall Street over election outcomes, highlighting the risks of allowing political betting markets to operate. Specifically, they warned that such markets can undermine the fairness of elections and erode the fundamental principles of democracy in the country.
According to them,
“Allowing billionaires to wager extraordinary bets while simultaneously contributing to a specific candidate or party, and political insiders to bet on elections using non-public information will further degrade public trust in the electoral process.”
They have also clarified that election betting does not take into consideration the interest of the public and will make many wonder if their votes counted.
The legislators noted that since many states in the country have banned election betting, it is only right that the same ban be implemented on the federal level, as not doing so could undermine state laws.
This concern is particularly timely, as cryptocurrencies have emerged as a major talking point in the US electoral race. In fact, wealthy investors have already wagered over $200 million on the outcome through prediction markets like Polymarket.
According to a Polymarket data, Republican candidate Donald Trump has a 53% probability to win the election This is likely due to his vocal support of cryptocurrencies, which has resonated with many market enthusiasts. However, not everyone is convinced about Trump’s pro-crypto agenda. Robert F. Kennedy, a vocal critic, has spoken out against Trump’s crypto enthusiasm in the lead-up to the November election, highlighting potential risks and uncertainties associated with Trump’s crypto-friendly policies.
Preceding Interactions Between the U.S. Senators and the CFTC on Election Betting
This marks the latest instance of U.S. senators urging the CFTC to ban election betting in the US.
In August 2023, Senator Merkley and other lawmakers wrote a letter to the CFTC’s Chairman Rostin Behnam. They strongly asked the commission to reject a proposal by KalshiEX, a private prediction market operator, which sought to legitimize betting on U.S. elections and their outcomes.
The senators warned that if approved, the Kalshi plan would create a profit gambling market where anyone can bet and profit off political outcomes and interfere with elections.
This would not only further erode trust in the integrity of American elections but could open the door for the wealthiest Americans to further interfere in election outcomes.
The CFTC disapproved Kalshi’s proposal, citing that their contracts involve gaming and activity that is unlawful under state law and is contrary to the public interest.
